What is Profit and Loss? its formulas ? and Real Life Word problems on Profit and Loss With Verified Solutions

Profit and Loss:

Cost price or Purchase price:

The price at which someone purchases a particular item/article/thing/product is called cost price or purchase price. Symbolically cost price is denoted by CP.

Sale price :

The price at which a particular item/article/thing/product is sold to the customer is called the sale price. Symbolically sale price is denoted by SP.

Marked price or List price:

The price on the label of an item/article/thing/product is called the marked price or list price.

The written price at which item/article/thing/product is intended to be sold

Profit (Gain):

If the sale price is greater than the cost price, there is a profit or gain.

We know that in a business, generally goods are bought at a certain price and sold at a higher price. In such a case, there is a gain.

Therefore

Gain (Profit) = Sale price - Cost price

Gain (Profit) = S.P - C.P

Profit percent (%):

The increased percentage is called the profit percent. It is calculated as a percentage of the cost price as shown below.

Loss:

If the cost price is greater than the sale price, there is a loss.

When sometimes goods are bought at a certain price and sold at a low price. In such a case, there is a loss.

Therefore

Loss = Cost price - Sale price

Loss = C.P - S.P

Loss percent (%):

The decrease percentage is called the loss percentage. It is calculated as a percentage of the cost price as shown below.

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[Key Fact-1: Profit or Loss is the difference between C.P and S.P]

[Key Fact-2: Profit or Loss Percent whichever is to be determined, is found on C.P.]

[Key Fact -3: While discussing gain, we often use two different terms, Profit and Markup.]

Profit is discussed above and for Markup (click here)

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Importance of Profit and Loss Percentage:

Importance of Profit and Loss Percentage Profit percent or loss percent gives a better comparison.

Example:

A shopkeeper buys toothpaste for Rs. 125 and sells it for Rs. 135. His profit is Rs. 10. He also buys a bottle of oil for Rs. 100 and sells it for Rs. 110. His pro again is Rs. 10. On which product does he get more profit?

The formula for profit percent

Thus
Profit percent for Toothpaste = `frac {Rs. 10}{Rs. 125}times 100`

Profit percent for Toothpaste = 8%

and

Profit percent for a bottle of oil = `frac {Rs. 10}{Rs. 100}times 100`

Profit percent for bottle of oil = 10%

Therefore, the shopkeeper gets more profit from a bottle of oil.

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Following are the Real-Life Word Problems on Profit and Loss solved in a proper and easy method with verified answers.
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Following are the 30 Real-Life Word Problems on Profit and Loss solved in a proper and easy method with verified answers.

Word Problem No. 1:

Ada bought a jewelry set for Rs.84,000 and sold it for Rs.855,00. Find the percentage of profit. (Ans. 1.79%)
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Word Problem No. 2:

Imran sold a bicycle for Rs.3,978 and got 17% profit. Find the cost price of the bicycle. (Ans. Rs. 3,400)
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Word Problem No. 3:

Hatim bought a bike for Rs. 135,000 and sold at 62% profit. Find the sale price of the bike. (Ans. Rs. 218,700)
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